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Underwriters take a more hands-on role in salvage - 06/06/2006
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Improving the claims process, writes Christina Kalimbassieris

In a market where ships are being worked intensively to meet demand, an active management of the claims’ process can deliver genuine financial benefits to both the hull and machinery and loss of hire underwriters, as well as ensuring that shipowners can keep their vessels in optimal employment.

This philosophy, which has traditionally been the core of the Scandinavian claims model, is increasingly being embraced by underwriters in the main marine markets, who are looking to be more involved in the salvage and repair process.

Surveyors are being used more proactively to ensure the best possible result in both the short- and longterm for both owners and underwriters.

The most vital first step immediately after a casualty, or after a vessel has been put back into safety, is the swift appointment of a surveyor to attend the vessel.

This allows for a very early preliminary assessment of the extent of damage, which helps the underwriters to form a first impression of the potential costs, and to assess what repair options are available.

Arriving at a correct assessment of the damage, and then being able to create an accurate specification can assist owners, and ultimately underwriters, in achieving tremendous savings on repair costs.

Getting the specification right, rather than getting it fast, is always the best policy. Clients are much better advised to delay repair decisions for a few days in favour of a well drafted and detailed specification. A vague specification will, almost certainly, lead to a vague shipyard tender, the result of which is inevitably huge extra repair charges at the end.

It is also highly advisable that the underwriters’ surveyor has a strong background in managing the tendering process and experience of working with shipyards. Costs can be controlled by considering such issues as the yard’s capability, capacity and pricing techniques, and an understanding of each of these factors according to geographic area.

If at all possible shipyards should be invited onboard to carry out their own assessment of the damage in order to produce a tender. This allows them to form their own opinion on the nature and extent of required repairs, and consider exactly how they would go about them.

In an ideal world, all the yards that are tendering for the job would visit the vessel simultaneously; this generally results in clearer tenders and more competitive pricing.

The management of the repair of the vessel is another area where the early involvement of the surveyor can be a very positive influence.

For example, in a recent case of a grounding of a newly-built tanker vessel we ensured that the prefabrication of the steel had been almost completed when the vessel arrived at the shipyard so that the time for repairs was kept exactly to the tender. The resulting savings benefited both the loss of hire underwriters and the owners.

The negotiation and agreement of the final repair bill requires experience and understanding of the yard’s costing practices, and a surveyor’s wider experience across a range of cases can be helpful in assisting with this.

Much of this comes down to having the technical expertise to really understand the processes required, to appreciate local and regional practices and know how a particular shipyard works.

By ensuring that the right steps are taken, at the right time and in the right order, a potentially expensive and difficult process can be managed to a controlled and effective outcome for all parties involved.

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